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Point Blank's Ballistic apparel sales rise in Q1

13
May '08

Point Blank Solutions Inc a leader in the field of protective body armor, announced its results of operations and financial position as of and for the first quarter ended March 31, 2008.

For the quarter ended March 31, 2008, net sales were $49.9 million, compared to net sales of $92.1 million in the quarter ended March 31, 2007.

As has been previously announced, the Company responded to several solicitations for which the contract award dates were extended, including for the Improved Outer Tactical Vests (IOTV) bridge buy, the IOTV base buy, Deltoid Auxiliary Protective System (DAPS) and Modular Lightweight Load-carrying Equipment (MOLLE).

The decline in net sales for the comparable periods is related specifically to the continuing delays in the awarding of these solicitations.

Gross profit for the quarter ended March 31, 2008 was approximately $8.7 million (17.5% of net sales), as compared to approximately $18.7 million for the three months ended March 31, 2007 (20.3% of net sales).

The decline in gross profit margin as a percentage of net sales is due primarily to lower volume as a result of delays in contract awards, constraints on price increases due to the competitive market and higher raw material costs.

The Company expects that its joint venture, LifeStone Materials, which was created in March 2008, will improve gross margins and profitability.

Specifically, as ballistic apparel sales increase, theCompany believes its relationship with LifeStone Materials will enable it to reduce material costs, and more competitively price its products to increase sales and improve bottom-line performance.

For the quarter ended March 31, 2008, total operating costs were $10.3 million, a decrease of 15.0% compared to total operating costs of $12.2 million reported in the comparable 2007 period.

This decline was related primarily to a decrease in selling, general and administrative expenses of $1.1 million (principally due to reductions in legal and professional fees) and a $0.8 million reduction in litigation and cost of investigation expenses.

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